The time required to collect information about the current state of the economy is known as
A. the effect lag.
B. the recognition lag.
C. the action lag.
D. the fiscal lag.
Answer: B
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Two firms, Industrio and Capitalista, have access to five production processes, each of which has a different cost and gives off a different amount of pollution. The daily costs of the processes and the corresponding number of tons of smoke emitted are shown in the table below. Both firms currently use process A, and each emits 4 tons of smoke per day. The government is considering two plans to reduce pollution: requiring both firms to reduce pollution by 25 percent or auctioning pollution permits. Each permit would entitle the owner to emit one ton of smoke per day. Without a permit, no smoke can be emitted. Process(smoke/day) A(4 tons/day) B(3 tons/day) C(2 tons/day) D(1 ton/day) E(0 tons/day) Cost to Industrio ($/day) $350$400$500$700$1,000 Cost to Capitalista
($/day) $225$250$290$400 $600Suppose the government decides to sell 6 permits allowing a total of 6 tons of pollution. The government starts the bidding with an opening price of $30. What happens next? A. A total of five permits will be demanded, forcing the government to lower the price. B. A total of seven permits will be demanded, forcing the government to raise the price. C. Industrio will demand 3 permits and Capitalista will demand 3 permits. D. Industrio will purchase all available permits at $30.
A government budget deficit occurs during a budget year when
A) tax revenues > government spending. B) tax revenues < government spending. C) tax revenues = government spending. D) tax revenues + government spending = personal consumption.
The difference between income and consumption is
a. rent b. profit c. saving d. opportunity cost e. roundabout consumption
A minimum wage is the:
A. lowest wage that a firm is legally allowed to pay its workers. B. highest wage that a firm is legally obligated to pay its non-skilled labor. C. wage every high school dropout will earn if they are employed. D. prevailing wage for low-income workers in a nation.